Fees, Rates, & Terms

Here you'll find all of the most important details of student loan consolidation. We'll explain the basics of rates, fees, and terms for consolidation loans.

Rates

If you refinance student loan debt through the federal program, your rates will be determined with a weighted average of your current interest rates before lender discounts. This average is then rounded up to the nearest eighth of a percent. The maximum rate for federal consolidation loans is 8.25%. The rate determined by the weighted average will be fixed for the life of your consolidation loan.

Fees

The law prohibits lenders from charging any application fees for federal student loan consolidation. However, if you apply to refinance student loan debt privately, you might face origination or application fees. Remember that private consolidation loans are just like any other loan you would get from a bank-they involve credit checks, certain fees, and slightly higher interest rates than federal loans.

Terms

Depending on the outstanding balance of all your loans combined, you can have up to 30 years to repay your consolidation loan. If you choose to extend your repayment term when you refinance student loan debt, this will increase your total interest expense but make your payments smaller. Consolidation loans do not have prepayment penalties, though, so you can always choose to accelerate your payment schedule when your financial situation improves. Here is our repayment term schedule when you refinance student loan debt:

• $20,000-$39,999 in loans = 20-year repayment period
• $40,000-$59,999 in loans = 25-year repayment period
• $60,000+ in loans = 30-year repayment period